Back to Basics

By: Carrie Lennard, Euromonitor International

In 2008, the lion’s share of sales were accounted for by toothpaste, and toothpaste was the only segment of oral care to emerge relatively unscathed, maintaining the same growth rate (4%) as in the previous year.

The market left a lot of room for consumers to trade back down to nonvalue-added products as economic conditions worsened.

Russia added $1 billion in absolute growth 2007–2008.

Asia and Western Europe accounted for a combined 52% of the total $33 billion world oral care sales.

With value sales of $6 billion in 2008, the U.S. remains the biggest single oral care market.

In 2010, consumers will continue to focus on the basics such as toothpaste, but as consumer confidence returns, interest in all-around dental care should pique in emerging regions.

Oral care is proving to be one of the most recession-impacted categories in the beauty industry, despite its position as a staple part of the daily grooming process. The entire beauty and personal care market saw growth slide by one percentage point from 6% in 2006–2007 down to 5% in 2007–2008, while, according to Euromonitor International, the economic slowdown saw value growth for oral care at the global level dip to 4% in 2007–2008 from 6% 2006–2007.

Basic Oral Care Still Accounts for Greatest Sales

Despite the constant innovations and hype in oral care surrounding mouth fresheners and tooth whiteners, these actually only accounted for 1% and 2% respectively of the total 2008 global oral care sales. The lion’s share of sales are accounted for by toothpaste (51% of all world oral care sales in 2008) and toothbrushes (27%), according to Euromonitor. Indeed, it was the aforementioned mouth fresheners and tooth whiteners that suffered the most in the recession, with both experiencing value growth declines globally. Many consumers perceive these categories to be the most superfluous when it comes to necessary products for a good standard of oral hygiene, and many had no qualms about striking them off the weekly shopping list.

Toothpaste Keeps Up the Pace

Toothpaste was the only segment of oral care to emerge relatively unscathed, maintaining the same growth rate (4%) in 2007–2008 as the previous year. Times would have to be very hard indeed for most consumers to consider ditching toothpaste altogether, but it seems that even during hard times many are sticking to their preferred brand instead of switching to private label.

Discounting Hits

In the wider oral care market, the major global brands such as Colgate, Crest and Oral B also remained relatively untroubled by private label, which made modest increments in gaining brand share. The prevalence of discounting on branded products was one of the principal reasons behind this fact. Discounting and two-for-one deals have become commonplace in many regions. Although this practice is nothing new, price-conscious consumers have become less brand loyal and are increasingly opting for whichever brand happens to be offering the best price. The fact that a majority of oral care sales are made through grocery stores (62% of all oral care sales in 2008) does not help matters, as supermarket price wars mean that retailers have been keener than ever to compete with their rivals on price with products seen as essentials—and oral care falls into this area.